Giants Win Superbowl, Giant Wins for Sellers at Start of Year in Maplewood Real Estate

Last year at this time, we had no idea what to expect with the real estate market nor mother nature, for that matter.  We eventually would come to find that our first half of 2011 seriously lagged behind the first half of 2010.  But, for those us with a good memory, how could we not expect a deflated trend when being compared to an artificially supported First Time Home Buyer’s Credit in 2010.  This home buyer credit appears to have induced many second half year (summer/Fall 2010 ) buyer’s to move up their purchases.  This gave us hope for a housing market recovery, but unfortunately had the effect of leaving us with fewer 2^nd half buyers and, as a result, inventory levels began to swell as did average days on market.

Still, we welcomed the (prior) new year-2011 hoping for a fresh new additions to help jumpstart the season, only to find buyers were still uninspired by what was on the market, in fact, they appeared so disinterested, buyers gave us the impression that they only had a choice of which brand of expired milk to buy at a super market.  This only put more downward pressure on a challenging market, price-reductions started to increase as a result. 

We hoped our price reductions might have helped to get the market moving , but we then got hit with one of the worst winters I can ever remember.  Week after week we got pounded by the Snow Gods.  Our kids were happy, we may have even enjoyed building a snowman or snow-fortress with them (I know I did), but this only did more damage to the local real estate market as it prevented buyers from getting out to see our homes and frankly, made the curb appeal more like what you would expect to find in Buffalo, NY.

That was then, THIS IS NOW:  The Giant News is that as we start to see our traditional spring market business unfolding in 2012, we are seeing tremendous activity.  Maplewood is already showing 28 homes Sold and Under Contract vs 18 through the same period last year.  Hanging around in our office in downtown Maplewood is like hanging around a race track as we eagerly await to hear if which of the multiple bidders is going to win their home of choice. 

Multiple Offers is one of those experiences that combines the excitement of the “hunt” with the trepidation of having to inform my clients that we no longer have the apparent “exclusive” bidding “rights”—meaning that we have lost what we had hoped might be a serious advantage over the seller.  Thus, we see a bit of an improvement in the tug of war between seller’s and buyer’s.  

Traditional protocol calls for the Listing Agent to go out to all parties with bids and advise them to come back in 24-48 hours with “their highest and best” offer.  So, not only are we now bidding against another interested party, we are also bidding against ourselves.  How common is this?  Well, I tracked our sales verus  final listing prices in 2011 and can tell you in our area that 30-36% of the homes sold were purchased for at least final asking price and more; in fact, in our town and surrounding towns, homes even sold for 108%-136% of final asking price.  Can you price your home to sell at $500K and it sells for $540-$680K?

So, if you are a thinking of selling your home, this would appear to be a good time to get out there! 

At the same time, what advice do I give my buyers?  That if you are loving a home and think it is priced really well, don’t be surprised to find that there is another buyer who feels the same and at the same time. 

The key is to determine how much you can afford to spend (and I normally recommend they not spend up to every last dollar that  mortgage loan officer pre-approves them for) and how much they perceive the value of the home to be worth?  Given these two considerations, I then advise them to offer as much as they are willing and capable of offering where they can say they gave it their best shot and they won’t be disappointed to learn they lost by bid that is $3,000 greater than their best offer.  I give this advice as its so hard to see the looks on buyers faces when they can’t forgive themselves for not offering a little bit more, especially in these times of historically low interest rates and where a few thousand dollars in purchase price is spread out over 30 years, representing less than $50/month. 

Mark Slade

www.maplewoodandsouthorangehomes.com

www.maplewoodnjopenhouses.com

917-797-5059